Borrowing Money

Regardless of the type and size of value-added business, you will need money to operate it. If you are starting a new business, you will need money for business start-up. If you are buying an existing business, you will need money to purchase the business. If you are expanding your business, you will need money for the expansion. These financial needs should be outlined in your business plan.

The first source of money is equity funds provided by the owners of the business. However, equity provided by owners is usually not sufficient to cover all of the financial needs of the business. So money is often borrowed from a financial lender.

Whether you are borrowing a few thousand dollars for a direct marketing business or millions of dollars for an agricultural processing business, knowing how to approach lenders, present your business plan and negotiate loan terms is important for the success of your business.

Obtaining a Business Loan provides you with insight into selecting the right lender, examining the loan request from the lender’s perspective and identifying reasons credit lines get in trouble after the loan is made. Also, knowing How to Prepare a Loan Package is important for obtaining the type and amount of funds that you need.

For more information on this topic, see the links listed below of articles posted on related Web sites.

Borrowing Money

  • Borrowing Money - Small Business Administration -- Borrowing money is one of the most common sources of funding for a small business, but obtaining a loan isn't always easy.
  • Microloans - Entrepreneur.com -- When you need only a little cash to grow, it's time to check into microloans.

Applying for a Loan

  • Applying for a Loan - Small Business Administration -- Make your best presentation in the initial loan proposal and application; you may not get a second opportunity.

Revised September, 2019.